Accounting Practices and Subsidiary Books
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Questions and Answers

What is one benefit of having separate subsidiary books for different types of transactions?

  • It allows for random posting of transactions.
  • It eliminates the need for specialisation.
  • It makes it easier to locate individual items. (correct)
  • It combines all records into a single book.

How does the division of work among different personnel improve accounting practices?

  • It reduces the overall volume of transactions.
  • It allows for simultaneous work on various books. (correct)
  • It restricts individual accountability.
  • It encourages the use of a single journal for all transactions.

What is a key advantage of specialisation in accounting work?

  • It simplifies the overall accounting system.
  • It leads to a higher likelihood of errors.
  • It reduces the number of records that need to be kept.
  • It improves efficiency of the accounting processes. (correct)

What role do subsidiary books play in decision-making for management?

<p>They allow for a detailed analysis of specific transactions. (D)</p> Signup and view all the answers

In what way do subsidiary books help in minimizing errors and fraud?

<p>By enabling a division of responsibilities that facilitates internal checks. (A)</p> Signup and view all the answers

Which aspect of subsidiary books provides detailed transaction information?

<p>They contain all aspects of a particular type of transaction in one place. (A)</p> Signup and view all the answers

How do subsidiary books facilitate efficient posting in accounting?

<p>They organize similar transactions in one place for easy transfer. (A)</p> Signup and view all the answers

What is a disadvantage of maintaining only one journal for all transactions?

<p>It makes it harder to locate specific transaction details. (D)</p> Signup and view all the answers

What is the purpose of an invoice in a business transaction?

<p>To provide details of the goods sold to the buyer (C)</p> Signup and view all the answers

What is a trade discount?

<p>A deduction from the list price for bulk purchases (C)</p> Signup and view all the answers

How is the net amount recorded in accounts after applying a trade discount?

<p>The sale amount minus the trade discount is recorded (C)</p> Signup and view all the answers

What happens to trade discounts in accounting records?

<p>They are not recorded in the books of accounts (D)</p> Signup and view all the answers

If an invoice indicates a total of $10,000 with a 10% trade discount, what amount should be recorded in the books?

<p>$9,000 (C)</p> Signup and view all the answers

Flashcards

Subsidiary Books

Specialized accounting records used to record specific types of business transactions.

Systematic Record-Keeping

A structured approach to recording all business transactions.

Division of Work

Splitting accounting tasks into smaller parts, assigned to different people.

Efficiency (in Accounting)

Increased speed and accuracy in accounting tasks due to specialization.

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Decision Making

Using detailed accounting data to inform business strategies.

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Internal Checks

Procedures to prevent errors and fraud in accounting.

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Information Availability

Easy access to specific transaction details as needed.

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Detailed Information

Subsidiary books provide precise data for each transaction type.

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Invoice

A document from a seller to a buyer detailing goods or services sold, including quantity, price, and total value.

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Trade Discount

A deduction given by a seller to a buyer on the listed price, often for volume purchases. Not recorded in accounts.

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Source Document

A primary document that provides evidence and details for a transaction.

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Invoice Purpose

To detail goods/services sold, price, quantity and total.

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Trade Discount Recording

The net price (after discount) is recorded, not the discounted amount.

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